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Insurance Settlement, Why Do They Occur?

Why Do Insurance Companies Go Forward With An Insurance Settlement?

Insurance Settlements Often Occur Because of Specific Strategies

An insurance settlement can occur all the time, as made apparent by the many commercials asking policyholders who have won some type of suit to collect their check, or simply knowing an individual who has received an insurance settlement.

However, as a policy holder, you may wonder why an insurance company might choose to settle and what that might mean for you.

What Is An Insurance Settlement?

In short, an insurance settlement is the payment or series of payments paid out by the insurance company to the insured in order to make good on a specific insurance claim.  The amount is typically determined based on a case by case basis and is typically also based on prior stipulations, set forward for the policy holder(s).

Why Does An Insurance Settlement Occur?

In general, it is because insurance companies do not want to pay over time or they typically find that they can reach an insurance settlement for a lower amount as opposed to potentially running the risk of a higher payout.  Long term injuries, especially those with chronic conditions, mean that the insurance company stands to pay out over a longer length of time. They do not want to do that!

There have been many cases in which employees are injured and that injury will be sustained over a period of time.  For example, if an employee injures their back, then it is not out of the ordinary that they will have chronic pain, require long term treatment, and so forth.

Thus, more often than not, insurance companies are eager to settle in order to avoid paying out in the long run.

It is important to know your rights!  We can help you navigate through many different types of insurance needs and answer any questions you may have.

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Why General Liability Insurance Isn’t Enough

General liability insurance is, as the name suggests, extremely general.  It essentially covers the basic needs and requirements set forth between the insurance company, and as agreed upon by the policy holder.   Exclusions, then, are what would not be covered by  general insurance, and as such, could potentially leave the policy holder at risk.

Why Isn't General Insurance Enough?

As mentioned, general liability insurance only covers a specific amount, as set forth by the insurance company.  This would not cover any exclusions that might apply.  For example, if you are in the real estate industry and you want to flip a property and therefore need to hire a contractor, general insurance will not cover contractor lawsuits or injuries.  This is because you need a separate contractor liability insurance policy to ensure coverage.

In another example, if you are in the food and beverage industry and you sell liquor liability, then you may need liquor liability insurance, especially if you sell more than 50% alcohol.  General liability insurance simply may not offer coverage.  Thus, if you have a patron that leaves leaves your facility drunk, and then gets into a car accident, you may be liable.

What Do You Need Beyond General Insurance?

In short, general liability insurance is extremely broad and, as mentioned, it may not be enough to offer enough coverage, should a discrepancy occur.   This means that you need specific additional coverage that would maintain coverage for your specific industry.  As mentioned, if you are in the food and beverage industry, you may need liquor liability and so forth.  No matter what commercial industry your business resides in, we can find the right insurance for you.